INT1018

Introduction

This is an application by Mr Robert Herod (the Applicant) made pursuant to s.33(1) of the Industrial Relations Act 1946. In his application the Applicant is seeking the opinion of the Court on whether the Registered Employment Agreement for the Construction Industry (Wages and Conditions of Employment) (hereafter the REA) is applicable to him in relation to his employment with PHI (Ireland) Ltd (hereafter the Respondent) between 4th April 2005 and 9th June 2010.

Meaning of ‘Building or Civil Engineering Firm’

The REA applies to workers employed by building and civil engineering firms. The second schedule of the REA defines a building firm as : -

"a firm the principal business of which is one or a combination of any of the following activities;

• “[A]n undertaking the principal business of which is one, or a combination of any of the following activities: -
  • (a) the construction, reconstruction, alteration, repair, painting, decoration and demolition of : -

• • • • roads, paths, kerbs bridges, viaducts, aqueducts, harbours, docks, wharves, piers, quays, promenades, landing places, sea defences, airports, canals, waterworks, reservoirs, filter beds, works for the production of gas or electricity, sewerage and all work in connection with building their sites and mains;

• • • • rivers works, dams, weirs, embankments, breakwaters, moles, works for the purpose of road drainage or the prevention of coastal erosion;

• • • • cattle markets, fair grounds, sports grounds, playgrounds, tennis-courts, ball alleys, swimming pools, public baths, bathing places in concrete, stone tarmacadam, asphalt or like material, any boundary walls, railings, fences and shelters erected thereon.

Position of the parties

The Court was told that the principal business of the Respondent involves what was described as “Geotechnical Engineering, Slope Stabilisation and Erosion Control”. The work involves filling wire baskets knows as ‘Gabions’ with rock and other materials and then placing the component in situ on a building or civil engineering site. The purpose of the process is to level or prepare sites for buildings or to prevent site erosion.

The Respondent contends that it is primarily involved in the design of retaining systems and their supply to building, civil engineering and landscaping contractors. They do, however, occasionally fix the Gabions but claim that at present they undertake very little work of that nature. They say that even in situations in which they do install the Gabions the bulk of the activity takes place off-site and that the costs associated with placing the filled Gabions on site accounts for a relatively insignificant proportion of its overall costs. Reliance was placed on previous decisions of this Court to support the proposition that were more than half of a firm’s overall costs relate to off-site activity is not encompassed by the REA.

On behalf of the Applicant the Court was told that the vast majority of his working time was spent on building or civil engineering sites where he engaged in general duties appropriate to a construction operative. While there was some disagreement as to the precise proportion of the Applicant’s time spent on sites the general proposition in this regard advanced on behalf of the Applicant was accepted by the Respondent.

The Court was told that the Respondent generally operates as a subcontractor to principal building and civil engineering contractors. It is the holder of a C.2 certificate of authorisation issued by the Revenue Commissioners through which it is paid in full for the costs of its services to principal contractors. This indicates that the work undertaken by the Respondent is classified a ‘building operations’ for the purposes of s. 530 of The Taxes Consolidation Act 1997.

The Court’s attention was also drawn to the fact that on its statutory returns under the Companies Acts the Respondent described its principal economic activity (NACE) code as“general construction of buildings and civil engineering works”

The Court’s attention was also drawn to promotional material published by the Respondent in which it holds itself out as a providing design, supply and installation services on all of its products. The Respondent also describes the applications of its products as including: -

•Retaining wall structures,

•River and canal training works,

•Erosion and scour protection; roadway protection,

•Hydraulic structures, dams and culverts,

•Costal embankment works

•Rockfall and soil erosion protection

•Architectural feature retaining walls

•Architectural cladding for walls

Finally the Respondent’s sales analysis by product (which was put in evidence by the Respondent) shows that in the years 2007, 2008 and 2009, supply and installation of product accounted for between 63% and 68% of sales revenue. Estimated figures for 2010 to date indicate that supply and installation accounts for 27.36 of sales. However the figures presented also shown what is described as‘on-site labour as a % of total supply and install’as accounting for 4.95% of costs.

Conclusions of the Court

The Respondent placed considerable emphasis on the breakdown of costs between on-site and off-site activity. In the Court’s view that type of breakdown cannot avail the Respondent. There is no meaningful distinction in this instance between the activities undertaken on-site and off-site for the purposes of determining the applicability of the REA. Both are an integral and indissociable part of the same process and cannot logically be regarded as separate or unconnected activities. Moreover, the apportionment of a firms costs between on site and off site activity cannot be regarded as the sole or determinative criterion in deciding if it is covered by the REA. Previous cases in which this factor was considered, and to which the Respondent referred, involved claims by the employer that its main activity involved the manufacture of goods off site. In this case there is no suggestion that the Respondent is involved in a manufacturing process.

In this case it is clear to the Court that the process undertaken by the Respondent involves the preparation of sites for buildings or for the construction of roads and paths and the prevention of erosion. This is activity which is an integral part of the process of constructing buildings and the construction of roads. It clearly comes within the ambit of the Second schedule of the REA and in consequence the Respondent is a building or civil engineering firm to which the REA relates.

Decision

For the reasons set out in this determination the Court is satisfied that the REA is applicable to Respondent herein and that the Applicant was employed by the Respondent as a Construction Operative and while so employed was a worker of a type class or group to which the REA is expressed to apply.







Signed on behalf of the Labour Court



Kevin Duffy
3rd September, 2010______________________
MG.Chairman



NOTE

Enquiries concerning this Decision should be addressed to Madelon Geoghegan, Court Secretary.